Gov. Brown to decide on Hollywood tax credits

California Gov. Jerry Brown is deciding whether to sign a bill that would provide more subsidies for Hollywood production companies, but not everyone is siding with moviemakers. Some believe the tax credits should benefit education.

To help keep movie and television production in California, the Legislature and former celebrity Gov. Arnold Schwarzenegger gave Hollywood $500 million in tax credits in 2009.

Now Brown has to weigh a proposal to give the industry $200 million more, where companies can use up to 25 percent of certain expenses to offset taxes instead of going to state coffers.

A coalition representing the Teamsters Union and others in film say the first tax break has created 39,000 jobs and provided $325 million in state and local tax revenue in the three years it's been in effect.

In contrast, the Milken Institute says in the decade prior to the tax credit, California lost 36,000 production jobs and $200 million in tax revenue. Just last month, San Francisco was able to snag Woody Allen's new movie.

"We want to keep it in California, and we're facing a lot of competition from other states and countries that provide similar kinds of incentives," said Barry Broad with the Teamsters Union.

But the state is broke. Critics think the money could be better spent on programs that have been drastically cut during this bad economy.

A UCLA study found for every dollar the state gave in film credits, California got back $1.04, and it might be even less than that, according to the non-partisan Legislative Analyst Office.

Educators say public schools could use the money. They can create jobs too by hiring more teachers or they could buy new textbooks.

"So while we're cutting public education to the bone, and we're making all these really tough choices, and we're giving away $200 million to Hollywood for something that doesn't have a return. We can't afford that," said Kevin Gordon, a public schools budget advisor.

Supporters of extending the Hollywood tax break say the studies don't take into account the big picture.

"There's a multiplier effect for each of these dollars. Many more dollars are spent, but those are not always measured in these reports," said Broad.